California Union Square L.P. v. Saks & Company LLC.
4:17-cv-01765
N.D. Cal.May 23, 2017Background
- Plaintiff California Union Square L.P. sued in state court; defendant Saks & Company LLC removed the case to federal court (Case No. 17-cv-1765).
- Removal raised federal diversity jurisdiction under 28 U.S.C. § 1332; defendant bore the burden to show removal was proper.
- Plaintiff submitted an affidavit laying out its ownership chain: a limited partnership whose ultimate controlling corporate member is a New York corporation, making plaintiff a citizen of New York for diversity purposes.
- Defendant Saks LLC’s sole member is Saks Incorporated, a Tennessee corporation with its principal place of business in New York, making defendant also a citizen of New York.
- Because both parties are citizens of New York, the court found no complete diversity, granted plaintiff’s motion to remand Case No. 17-cv-1765 to state court, denied plaintiff’s request for attorneys’ fees, dismissed related Case No. 16-cv-4043 for lack of jurisdiction, and struck a confidential exhibit (Dkt. No. 33-5) without requiring refiling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of diversity jurisdiction | No complete diversity: plaintiff is a New York citizen via its ownership chain | Removal was proper (argued diversity existed) | No diversity; remand granted |
| Citizenship of unincorporated entities | Partnerships/LLCs take citizenship of their members; plaintiff ultimately NY | Disputed characterization of members’ citizenship | Plaintiff is a NY citizen; defendant also NY; destroys diversity |
| Attorneys’ fees under 28 U.S.C. § 1447(c) | Fees and costs should be awarded after improper removal | Removal was at least reasonably debatable; plaintiff contributed to confusion | Fees denied |
| Related case and confidential filing | Case No. 16-cv-4043 lacks diversity and is moot; confidential exhibit should be struck or redacted | (Implicit) leave to maintain filings in federal docket | Case No. 16-cv-4043 dismissed for lack of jurisdiction; exhibit struck and no redaction required due to dismissal |
Key Cases Cited
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (removal jurisdiction disfavored and defendant bears burden to show propriety of removal)
- Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006) (unincorporated entities are citizens of every state of which their members/owners are citizens)
- Wisconsin Dept. of Corr. v. Schacht, 524 U.S. 381 (1998) (presence of a nondiverse party defeats federal diversity jurisdiction and cannot be waived)